China will increase its provision of low-priced housing and medical care to boost spending

Channel News Asia
China to free up cheap housing, care to boost spending
Posted: 05 November 2008 1804 hrs

BEIJING : China will increase its provision of low-priced housing and medical care, a senior leader said in the state media, in a bid to free up spending power and boost consumption.

The statement by Vice Premier Li Keqiang comes as the country is forced by weakening exports to rely increasingly on consumer spending as a source of future growth.

"Government-funded housing projects and basic medical service facilities will be the two areas we will focus on to boost domestic consumption," Li said, according to a Xinhua news agency report late Tuesday.

Expensive housing and high medical costs are two of the reasons that millions of Chinese are saving large portions of their income rather than spending it.

Official data show that China's household savings have exceeded 20 trillion yuan (2.9 trillion dollars), with new deposits reaching 3.3 trillion yuan in the first nine months of this year.

China's growth slowed to nine percent in the third quarter of the year, the lowest quarterly figure since the second three months of 2003, partly due to a slowdown in exports.

And the trade surplus for the first nine months of the year fell 2.6 percent year on year to 180.9 billion dollars.

- AFP /ls